A Nash Equilibrium Occurs When

question 136

Multiple Choice

A Nash equilibrium occurs when

• A)supply equals demand.
• B)no firm expects an increase in profits by changing its business strategy unilaterally.
• C)all firms maximize profits.
• D)all firms minimize costs.
• E)no one is better off without making another individual worse off.

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Definitions:

Elasticity Coefficient

The elasticity coefficient measures how much the quantity demanded or supplied of a good responds to a change in one of its determinants, such as price, income, or the price of related goods.

Perfectly Elastic

Describes a market situation where demand or supply can change infinitely with even the slightest change in price.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at each price point.

Homogeneous Product

A homogeneous product is one that is seen as identical or nearly identical in quality, appearance, and function, regardless of its manufacturing source, making it difficult for consumers to distinguish between different brands or suppliers.